You Are Offered a Choice Between $770 Today and $815

question 43

Multiple Choice

You are offered a choice between $770 today and $815 one year from today. Assume that interest rates are 4 percent. Which do you prefer?

• A) $770 today
• B) $815 one year from today
• C) They are equivalent to each other.
• D) $770 today at 3 percent interest rates

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Definitions:

Government Purchases

Expenditures made by the government sector, including spending on goods and services by local, state, and federal governments.

Consumption

The purchase and use of goods and services by households.

Net Exports

The value of a country's total exports minus its total imports, representing the balance of trade.

1930s

A decade marked by the Great Depression, significant economic hardship, unemployment, and social changes worldwide.